The Bombay High Court has dismissed a plea by Essel Group's Amit Goenka challenging Security and Exchange Board of India's (SEBI) decision to appoint KPMG Assurance and Consulting Services LLP (KPMG) as a forensic auditor in 2021 in its probe into the alleged Shirpur Gold Refinery fund siphoning case. Goenka served as Shirpur's non-executive chairman until 2021-22.
Goenka has also challenged the market regulator’s reliance on KPMG's report in an interim order-cum-show cause notice against him and others in the matter.
SEBI, in an interim order on April 25, 2023, had levelled serious allegations of fund diversion against Shirpur Gold Refinery, a debt-ridden entity within the Essel Group. The company is currently undergoing insolvency proceedings, and Goenka and others were restrained by SEBI from diluting their assets.
Senior advocate Pradeep Sancheti, appearing for Goenka, submitted that KPMG, a non-Chartered Accountant firm, did not meet the eligibility criteria under the Chartered Accountants Act, 1949, to conduct a forensic audit. KPMG's name was not listed among firms registered with the Institute of Chartered Accountants of India (ICAI), he added.
Also, KPMG’s report dated March 21, 2023, lacked mandatory elements such as a Unique Document Identification Number (UDIN).
SEBI’s counsel Mustafa Doctor pointed out that KPMG was appointed as the forensic auditor on September 13, 2021, hence Goenka had filed the plea belatedly.
The HC agreed with SEBI’s arguments that Goenka had challenged KPMG's eligibility before SEBI, hence the present petition becomes redundant.
“We do not find any justifiable reason assigned by the petitioner in the writ petition for the belated challenge being raised to the appointment of KPMG as Forensic Auditor on 13th September 2021,” a bench of Justices AS Chandurkar and Rajesh Patil said on August 14. “Thus, much water has flowed after issuance of the communication dated 13th September 2021 appointing KPMG as Forensic Auditor,” it added.
Dismissing the petition, the bench clarified that it had not examined the merits of the case and that Goenka is free to pursue his objections before SEBI in accordance with the law.
